Poh Kong is looking at golden revival in share price

Poh Kong Holdings Bhd hit a 45-month high of RM1.35 on 20 May this year, as investor demand surged across the broader metals market amid optimism that the US may cut interest rates this year.

Poh Kong– which typically benchmarks the purchase price of gold materials and selling price of gold jewellery against the prevailing gold price at the time of transactions. It stands to benefit from rising gold prices, which rose 28% YTD to USD2,650 per oz.

It reported a net profit of RM22 million, a 4.4-fold rise YoY in 4QFY24, while revenue grew 8.5% to RM342.5 million from RM315.7 million. The company attributed the revenue growth mainly to higher demand for gold jewellery and gold investment products during the quarter.

Gold prices hit another record high of over US$2,636.85 (RM11,003.58) per ounce. This is on the back of broadly dovish comments from US Federal Reserve officials and escalating tensions in the Middle East.

This brings its performance to RM116.9 million in FY Jul 2024 (up 49% YoY). Poh Kong’s cumulative revenue for FY2024, which ended on July 31, 2024, rose 11.7% to RM1.64 billion from RM1.47 billion in the previous year.

The company had been consistently profitable in the past 5 financial years. Net profit fluctuated between RM24.4 million and RM92.2 million, with the net profit in the latest financial year being RM78.4 million.

Earnings per share increased to 28.49 sen from 19.12 sen. Based on its latest full-year results, the stock is currently trading at a trailing PER valuation of 3.9x, cheaper than its peers.

Poh Kong is confident that it has adequate measures in place to meet challenges in FY2025. This should provide some impetus for investors looking to ride on the golden wave.